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2012 Health Co-insurance Policy for Monroe Employees
Monday, February 27, 2012 2:23:29 PM - Monroe Ohio

by Kristina Mayes, Deputy Clerk of Council

A Resolution adopting a 2012 Health Co-insurance Policy.

Mr. Brock stated this Resolution will allow for the adoption of a healthcare co-insurance policy
as described in the legislation. As we went through the process and looked into our healthcare
plan for this year, the out of pocket maximum did raise on the employees. There was a request by
Councilman Black to take a look at that out of pocket expense to see if the City could cover a
portion of that. The policy covers the second half of the $4000/$8000 out of pocket expense of
the employee; $2000 on the back end of that for medical expenses only. When we looked at the
prescription plans, it became difficult to administer that in-house because the employee has to pay
those prescription costs at the time they receive that prescription. There’s a risk there of the
employee receiving reimbursement from the City as well as their HSA. We could not contribute
directly into the HSA at that point because it would put it into a position where the contribution
would be above the federally regulated amounts. The policy we put together would be a direct
payment of those medical expenses for the last $2000 on a family coverage of that out of pocket
expense, which is at a 10% rate of the cost of the medical care that was given.

Mr. Black inquired if the grievances from the Unions are still active. He added so anything we
pass here may be nullified by the outcome of the grievances.

Mr. Brock replied the grievances are still active; however, he doesn’t believe anything passed
here has a bearing at this point on the grievances. He added there is some consideration by the
Unions contemplating what we do here, whether that settles the grievances or not. The
grievances are on contractual language and not necessarily what we are looking at here tonight.

Mr. Black asked if the grievances went to arbitration and they were awarded some additional
benefits that would change our calculation on what we are trying to do.

Mr. Brock replied yes, that could change what the City pays towards healthcare.

Mr. Black asked if it would be better to put this on the table until they received resolution to
those issues.

Mr. Brock stated it is his opinion that the grievances are separate from this, and it is his opinion
that the City is in a good position with the grievance and this is not a resolution of those
grievances, it is just something we are looking to do for the employees. He added these are
separate and one does not affect the other, if you want to wait for the outcome then yes that
would be advisable.

Mrs. Stillman asked what changes Mr. Brock had put together in comparison to what he
originally presented to Council. She added what type of increase in cost is it to the City for these

Mr. Brock stated policy wise he indicated there was a $160,000 in cost but didn’t have the
numbers in front of him. He said they would have to budget an additional $26,000 to cover for
instance if everyone utilized this policy, worse case scenario. He added that it is likely that
won’t happen, and they would look at roughly in the $20,000 range of what this would cost the
City for those employees who hit the high end of the deductible. He said as we look at those
insurances, those are the employees who have traditionally hit their out of pocket in the past. He
said this is not from information we can receive from the insurance company because we are a
small group. It is information we are receiving from different sources and employees, so it is not
hard and firm in that nature, but as we look at what we budgeted versus the reduction we saw in
the plan we put together we would not have to change appropriations at this point. It would be
Council’s decision to if they want to appropriate the additional $26,000 understanding there is
potential there, and later down the road we could adjust appropriations, but his advice would be
to appropriate it all at this time.

In response to Mr. Hickman, Mr. Brock confirmed we have grievances from each of our Unions.
He added at this point one has gone to arbitration, and we had a date set but we suspended that
date, they are ready to continue that arbitration now so we will go back to the arbitrators and try
to set another date, which should be in April or early May sometime depending on the
availability of the arbitrator.

Mr. Kelley asked what basis they gave for extending the arbitration, why would you do that.
Mr. Brock stated we will go and schedule it as soon as possible.

Mr. Hickman suggested voting it down today and wait for the grievances to go through and see
what happens.

Mrs. Stillman asked why the continuation by the Unions.

Mr. Brock replied the continuation was asked for by the Police Union and the arbitrator granted
it. In response to Mrs. Stillman, Mr. Brock stated the reason given was to see if we were going
to do anything with this health insurance policy.

Mr. Kelley noted that Mr. Brock stated this has nothing to do with the grievances, and Mr. Brock
confirmed yes, it is his opinion that they are separate.

Mr. Rubin added that all of our employees are working on a zero pay increase, and this is
additional money out of their pockets. She stated she thinks it is only fair that we cover that. She
added it is still a savings to us to use this insurance but we need to cover that for our employees
to keep them from going backwards.

Mr. Hickman asked if we wait until the grievances are over with, as far as the employees when
they typically meet that level.

Mr. Brock replied it depends on the employee; we have had indication that some will hit that
$6,000 as early as March.

Mr. Kelley asked what is the worst case scenario, if the unions win the grievances to the City

Mr. Brock stated he couldn’t answer that, there are too many variables. He clarified we are
putting something out there that cost us $160,000, worst case it will cost more than that.
Mr. Routson stated it is a first reading but what he hears is Mr. Hickman would like to vote it
down and Mr. Black would like to table it which he agrees would be the proper thing to do
tonight if there is still some uneasiness.

Mrs. Rubin stated she would rather do the first reading and if there is more facts to gather to do it
between now and the next meeting, and we could always table it at the next meeting instead of
dragging it out longer. She believes the employees deserve an answer quickly.
Mrs. Stillman stated they know what their insurance is going to be its just this one additional
factor of the insurance that will potentially be changed.

Mr. Hickman stated he is still trying to figure out what happened. We had a plan and then the
next thing the plan isn’t good enough. Were the Unions not part of the committee that reviewed
that? Did you not have an agreement when you brought it to Council?

Mr. Brock replied no, he further explained that he took a recommendation from the Committee,
and he made his own recommendation to Council. He added the Committee he put together of
those staff members to gather input, not to present a recommendation to Council. He added he
did use input he gathered from the Committee in his recommendation.

Mr. Kelley asked what the difference was from the recommendation of the Committee and Mr.
Brock’s proposal to Council.

Mr. Brock replied of the members of the Committee three of the members were for the proposal,
and two were against (representatives from the Fire and Police Unions) at the time he made his
recommendation. He added the Teamsters at the time were for the proposal. He responded there
are 12 employees in the teamsters union, 31 union members in Fire and 25 in the Police, and the
remaining are non union employees of the city that make up the 90 that take the insurance.

Mr. Brock stated he presented a couple different plans to the Committee, and the police union
indicated they didn’t like any of those, and wanted something different that wasn’t offered. They
wanted the HSA, but they also wanted us to cover what we covered last year but that would not
possible given the budget we have.

Mr. Brock replied to Mr. Kelley and stated no, this would not be a bridge between what was
submitted and what they wanted. He added what he submitted was at a savings to both the City
and the employee.

Mrs. Stillman stated the premium was at an increase of 30%, and the proposal given to Council
tried to encompass most of the benefits as possible but was able to keep the increase down to

Mr. Brock stated the benefits are the same as last year, the cost of those benefits have gone up.
He stated the out of pocket expenses after you meet the $4000 deductible on the family plan
comes at a 10% co payment where it did not last year up to $8000.00.

Mr. Black stated that is at a 40% increase to the employee and we are trying to bring that back
down to a reasonable amount without a budget hit on our end. He added he would not have a
problem voting on it but would like to see the numbers on the worst case scenario budget hit if
we were to lose all four of the grievances.

Mr. Brock stated he has no way to calculate that. He added the arbitrator is going to decide.
Mr. Black stated let’s assume we have to pay for every dime of their insurance up to and
including the policy maximum.

Mrs. Stillman asked where he would use this information at.
Mr. Black replied for budgeting moving forward.

Mr. Kelley asked where Mr. Brock sees this going in the future. He added it’s clear the cost of
medical insurance isn’t going down anytime soon. We do it this year where do you see it going
next year or three years from now. Do you anticipate wanting to add benefits every year.

Mr. Brock stated up until this issue it has been the policy of Council to increase the deductible,
out of pocket expenses, and the coinsurance expense to reflect more of what the private sector
sees. As the policy went up the question was do we cover this portion. He added he doesn’t know
if it is a change of policy for Council but that is the question before them. If that is a change to
keep the employee where they are at, our costs are going to go up.

Mr. Routson stated the problem is we continue to ask staff to reduce their budget, but when it
comes to adding additional cost to our employees, early on it is ok this is what we are going to
do. But once we see the numbers we think we may not want to go there. He said as this group, if
we are going to present something to staff as something we want them to do, then we need to
stand by what we tell them to do. If we are not going to do that, then let’s not give them that
mission in the beginning. We are the ones that make the decisions; they are the ones that come
up with the ideas.

Mr. Kelley said he would submit a different plan, he would say that instead of creating a benefit
that you can’t take back, that we create a pool of money and a Committee that is represented by
employees decides how that is divided out based on need on a case by case basis. There is not a
benefit set in stone that you have to worry about taking back, the employees govern themselves,
and you put the amount of money you are going to spend on this in that pool, it is what it is, if
they burn it up giving it to one person because they want to do that then that is what they do.
Mr. Hickman stated he thinks you have to treat each employee the same, and not having other
employees deciding. Mr. Hickman asked when the grievances were filed.
Mr. Brock replied throughout December.

Mrs. Stillman added that she appreciates what Mayor Routson has said and it is the way she has
been looking at this also. She said she feels we have given a directive but when it comes on the
big picture, but when it comes down to the small details he tries to fit what we have asked him
to, that is where our heart strings start to catch up to us. We are making a large business decision,
but when it comes down to the hard facts you have to cut someplace and potentially harm or not
give as much benefit, it’s tough to make those decisions. She stated she understands if they are
not getting a pay increase, but the directive had been to bring the City more in line with the
private sector, and that is what Mr. Brock has been driving at for a few years now. She stated
she likes the idea of helping out if they are not getting an increase on pay she would like to help
out on the heath care benefits side. But it needs to be understood that if that is the decision of
Council it needs to be understood by staff that this is a year to year decision based upon what is
going on overall, and if they get a pay increase next year that this will probably get pulled back
and not be on the table anymore.

Mr. Black stated this year he talked to some of our union members on pooling and maybe
looking outside the City offered plans and pool locally or regionally down the road to limit our
liability, but we are faced with this one right now.

Mr. Kelly stated what he’s been talking about for example is the Fire Union could pool insurance
and put a policy together that all firefighters could be a part of from municipalities all around the
state, they could get a far better rate for insurance then we could, and we would just pay a portion
directly to the union, and the union furnishes the insurance for them, and there is no
grievances on what policy they have because the unions will decided this is the best policy.

Mr. Routson stated they need to present something to us, that says if we allow them to take their
own insurance this is what it is going to cost us. We haven’t seen that.

Mrs. Stillman stated she is curious as to why that hasn’t happened. In theory that is a great idea
but it makes her curious why it has not happened yet.

In response to Mr. Hickman, Mr. Kelley stated we could still offer insurance for the non union
employees by pooling with the other municipalities to do the same thing. The union employees
are the ones that seem to have the most issues with the insurance. He added just because this is
how we do it, doesn’t mean there isn’t a better way.

Mr. Brock stated we have a vehicle for that and we offer $3,000 for employees that don’t take
our insurance, but if we look at that number as you suggest and see what is reasonable and still
come up with a savings for the City. They have a vehicle for that if there is an insurance plan out
there that they could pull into. We would give them a benefit for pulling out of ours now, and if
that number is high enough that is a question to look at.

Mr. Kelley moved to read Resolution No. 08-2012 by title only and consider this the first reading;
seconded by Mrs. Hale. Voice vote. Motion carried.

The Deputy Clerk of Council read Resolution No. 08-2012 by title only.
Mr. Kelley moved to approve the first reading of Resolution No. 08-2012; seconded by Mrs. Rubin.

Roll call vote: seven ayes. Motion carried. 

Source: Feb 14, 2012 Regular Meeting of Council

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